Sustainability and costs in aviation
Environmental sustainability has become a norm in the aviation industry. It isn´t any more something that is strategic or a sales argument; it´s something that should be built in every action every day. If it isn´t, it´s creating badwill for the company.
IATA, the global trade association of the airlines, representing 83% of all the airlines in the world, has a strong focus at the carbon reduction. It´s member airlines have committed to achieve net zero carbon emissions from their operations by 2050. IATA is expecting the whole aviation ecosystem to participate in this mission.
IATA´s strategy is that this would require a combination of various actions. According to IATA 65% of the results would come from the SAF (Sustainable Aviation Fuel), 13% from the new technologies like electric and hydrogen based energy sources, 3% from the infrastructure and operational efficiencies, and 19% from the offsets and carbon capture. Despite the major challenges in the business during the past few years, aviation is still a growth industry in the long term; this is putting more pressure on reaching the sustainability targets.
Despite the fact that the need for the sustainability actions is well understood within the industry, there are big challenges in implementing the actions. The biggest challenge is the money.
After pandemia and now in the politically unstable world the whole aviation industry has gained financially bad injuries. The airlines have been forced to cut down flying which has meant that the revenues for the other stakeholders like the ground handlers, the airports or the air navigation services have gone down as well. In this ecosystem it´s now hard to raise prices since the travelling hasn´t recovered well enough and the other stakeholders in the ecosystem are suffering financially as well. There´s no simple way to finance the sustainability needs.
All the other sustainability actions besides maybe operational efficiencies typically cost money. The SAF is three or four times more expensive than the traditional kerosene. The fuel costs are even with the kerosene about 20% or the airline costs so going towards the more sustainable aviation fuel mixture would definitely add costs remarkably. At the same time if the new energy sources for flying like electricity or hydrogen would become a commercially viable option, it would mean investment needs for the airlines´ fleet.
Renewing the infrastructure can mean not only new aircrafts, but also retrofitting existing ones or adding new solutions like winglets to them. On the airport and the ground handling side it can mean investing in electric ground equipment or in the future perhaps electric aircraft charging systems.
Offsetting or compensating carbon is a good thing, but it can´t be a big solution. The solutions must come from the changes in the industry. Real sustainability is in actions; only with true changes it is possible to reach permanent results. Offsetting could be a solution to go to the net minus carbon results, but that also costs money.
The difficulty of taking the sustainable actions can be seen in many airlines´ press releases. They might announce sustainable actions like saving fuel by carrying less weight if they sell only preordered meals or if they get a rid of the inflight magazines. This is of course sustainable, because less weight means smaller fuel consumption. But smaller fuel consumption means less costs as well. This is good, of course, that cost savings go hand in hand with sustainability; it´s helping with the sustainability targets. But since it might create worse passenger experience, I would value honesty. Treating passengers as if they wouldn´t understand all the reasoning behind the actions is bad business.
In every case even though the official IATA target is in the 2050, much quicker actions are needed. All the stakeholders in the industry are working hard to find more sustainable ways of doing business and coping at the same time the cost challenge. Even though finding financially more viable sustainable energy sources would make a giant leap forward, all actions lead to the right direction. Cooperation in the industry is definitely needed and all the ideas are welcome. Especially if they mean also cost savings.